idea #032: Crowdsourced Housing
Updated: Jul 21, 2019
Supply + Demand Equilibrium for residential development.
All multi-family developments are speculative to some degree. Developers aim to maximize profit with efficiency and utility. Sure there is plenty of market research that informs the planning, but how specific and accurate is it in reality? One thing is for certain, thoughtful design is almost always viewed as a luxury by real estate developers, and rarely is a project truly informed by its unique location and integrated to the site. That's problem #1. The second side of the equation is for the consumer and the community within these developments. If you wanted a custom townhouse or condo it's impossible. You are always constrained by what is available in the market which is up to the imagination and economics of the developer. Problem #2. Lastly, operating these buildings is a business, and typically is run by a management company that passes on those costs to the owners (HOAs). Problem #3.
So how do you both optimize the economics of development and deliver a more impactful design at the same time? Deliver the technology and construction know-how that allows a group of individuals, families, and investors to form a successful co-op. Conceptually, this would be similar to how a custom home is delivered but for tens or hundreds of owners.
The business would have 2 primary functions: design generation and execution of construction contracts. In broad strokes this is how it would work:
- Developers, banks, or local municipalities would register sites and land parcels on the platform, and set certain constraints or minimums that would need to be met for a project to be viable
- Individuals (prospective owners) would create their profile and complete a detailed assessment of what they're looking for. Budget, location, proximity to transit, bedrooms, baths, orientation, condo vs townhouse, amenities, owner-managed vs. professionally managed, preferences and trade offs, architectural styles, etc.
- The design generation tool would then intelligently create cohesive groups, and produce a schematic that maximized the needs/wants of the community while adhering to the budgets of the individual owners. (This would be a VERY complex optimization problem, but not out of reach.)
- Along with the design, a total construction cost can be calculated accurately, and advertised publicly direct to contractors.
- The group of owners can now form a cooperative enterprise, and choose to manage the construction themselves or with an intermediary, saving further costs across the board.
Essentially, you are creating the opportunity for custom multi-family development, and putting the long-term value in the hands of the community. For traditional real-estate developers, your risk goes down with greater certainty of demand, and focus can gravitate more towards land development and acquisition. You're not good at design anyways so...
This concept could be taken to a higher, urban planning level as well. A city could synthesize the input of its inhabitants to generate healthier zoning, planned urban developments, infrastructure, and other manifestations in the built environment that contribute to overall well-being and economic growth. Pretty crazy!
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